Payment for Promotional Samples

Payment for Promotional Samples

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A company supplies promotional staff and ran a promotion for a national food supplier where they gave away food samples and invited the recipient to make a donation to charity.  Some did, some didn’t. 

Although the promotional company acted as agent for the national company it seems that the promotional company may make the payment to the charity.  Should the income which was received be declared for VAT?  On the basis that the income was raised from ‘cold food’ which was a street promotion (not in 'food premises') would the income be zero-rated?

Thanks

Tim

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By Stuart.thomson
31st Oct 2014 02:30

I do not understand.

This is company which provides promotional staff and did not instruct "customers" to pay them. Surely this means any money received is a donation as there is no payment for a supply just a gift of food. If it is a donation it is not income and is out with the scope.

If for example, as I have done, i offer my services for free and ask (not a condition) that a donation of a value of their choosing is made to charity, should I raise a VAT invoice if someone pays me directly such that I have to remit funds to a charity of my choosing. I am just an unintentional collection/paying agent and VAT on that service (if you could call it a service probably not a VATable one anyway) is I believe based on the margin I charge which is £nil.

Alternatively consider a scenario where you accidentally put money in my business account, is that subject to VAT. No, because no service has been provided.

What am I missing?

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